AT&T U-Verse in dispute with Hallmark

Provider could drop cable channels Wednesday

AT&T U-Verse is locked in another carriage dispute, this time with Hallmark Channel and Hallmark Movie Channel.

The distribution system, which has 2.3 million subscribers, has threatened to stop carrying the two Crown Media-owned cablers if the parties don’t reach a new agreement by 12:01 a.m. Wednesday.

The scuffle with Hallmark comes about six weeks after U-Verse struggled to resolve a carriage dispute with Rainbow Media channels AMC, IFC and WE TV. That contract actually expired briefly, but negotiations ramped up to broker an agreement without transmission of the channels being disrupted.

History indicates that the same fate will result with the Hallmark channels, which have 90 million subscribers overall. But negotiations were at a standstill Thursday, as both parties took time out to issue public statements accusing each other of unreasonable demands.

“We’re fighting for a fair deal because our customers deserve the programming they want, at a fair price,” AT&T said. “We want to reach an agreement that is fair to our subscribers and for all parties, as we have with numerous other content providers.”

One difference in these talks is that Rainbow not only had the corporate heft of Cablevision behind it, but also the impending July 25 season premiere of “Mad Men” as a negotiating tool. Crown doesn’t pack the same power, and arguably its biggest programming weapon — the premiere of Martha Stewart Living Omnimedia’s eight-hour daytime lifestyle programming block on the network, including “The Martha Stewart Show” — won’t come until Sept. 13, nearly two weeks after the deadline.

“AT&T U-Verse TV recently went through a notable carriage renewal and is implementing the scare tactics it used to negotiate with another programmer against Hallmark Channels, one of the nation’s last surviving independent cable networks,” Hallmark exec veep of distribution Joan Gundlach said. “It is disappointing that AT&T U-Verse does not see the value we bring to their customers and that they would wield their power to strongarm our channels.”

The Hallmark-AT&T brouhaha isn’t the only one coming to a head next week. Thursday marks a deadline for Disney and Time Warner Cable to reach an agreement on carriage fees, putting that content at risk for TWC subscribers.